A federal judicial panel is advancing two federal antitrust cases against 37 Blue Cross and Blue Shield companies and the Blue Cross Blue Shield Association, the Wall Street Journal reported. One suit is being brought forth on behalf of health care providers and the other on behalf of small employer and individual customers.
According to the WSJ, the suit alleges that the companies are functioning as a cartel—that they divide up territories and avoid competing in certain markets—thereby driving customer rates up, while driving down payments made to providers.
Scott Nehs, general counsel for the BCBS association, told the WSJ: “This is a model that has withstood scrutiny over our entire history. There’s no smoky room involved, there’s no dividing up.”
The defendants previously attempted to have the suit thrown out, but U.S. District Judge R. David Proctor refused to dismiss the case, writing that the plaintiffs “have alleged a viable market-allocation scheme.”
Blue Cross and Blue Shield companies are independently operated, licensing the use of the Blue name from the association. BCBS plans cover about a third of Americans.